Cimarex Energy Co. (NYSE: XEC) today reported fourth quarter 2017 net income of $174.7 million, or $1.83 per share, compared to fourth quarter 2016 net income of $47.8 million, or $0.50 per share. Adjusted fourth quarter net income (non-GAAP) was $140.0 million, or $1.47 per share, compared to fourth quarter 2016 adjusted net income (non-GAAP) of $66.4 million, or $0.70 per share1. Cash flow from operations was $340.8 million in the fourth quarter compared to $185.1 million in the fourth quarter of 2016. Adjusted cash flow from operations (non-GAAP) totaled $357.1 million in the fourth quarter, a 63 percent increase from 2016 levels1.

For the year, net income totaled $494.3 million, or $5.19 per share. The adjusted net income (non-GAAP) for the full year was $443.2 million, or $4.65 per share1. Cash flow from operations totaled $1,096.6 million in 2017 compared to $625.8 million in 2016. Adjusted cash flow from operations (non-GAAP) totaled $1,185.6 million in 2017, an 88 percent increase from 2016 levels1. Revenues in 2017 totaled $1.9 billion, a 53 percent increase from 2016. The increase in revenues and cash flow was the result of higher production and higher realized product prices.

In the fourth quarter, total company production volumes averaged 1,204 million cubic feet equivalent (MMcfe) per day (201 thousand barrels of oil equivalent (MBOE) per day), up 25 percent from a year ago. Fourth quarter oil production averaged 61,771 barrels per day, an increase of 36 percent from 2016 levels. For the full year, Cimarex reported daily production volumes of 1,142 MMcfe per day (190 MBOE per day), up 19 percent from our 2016 average daily output of 963 MMcfe per day.

Cimarex invested $1.28 billion in exploration and development (E&D) in 2017, including $344 million in the fourth quarter. Investments made in 2017 were funded with cash flow and cash on hand. E&D capital exceeded the company's estimate for 2017 of $1.2 billion due to higher infrastructure spending, higher working interest and costs in outside operated wells, land acquisition and acceleration of activity.

Realized oil prices averaged $51.68 per barrel in the fourth quarter, 16 percent higher than the same period a year ago. Realized natural gas prices were lower in the fourth quarter and averaged $2.58 per Mcf versus $2.86 a year ago. Realized NGL prices averaged $25.88 per barrel up 43 percent compared to fourth quarter 2016. For the full year, realized oil prices averaged $47.06, up 23 percent from 2016. Realized natural gas prices averaged $2.76 per Mcf, a 19 percent increase from 2016. Realized NGL prices averaged $21.61 per barrel, up 54 percent from 2016 levels.

Total debt at December 31, 2017 consisted of $1.5 billion of long-term notes, with $750 million maturing in 2024 and $750 million maturing in 2027. Cimarex had no borrowings under its revolving credit facility and had a cash balance of $401 million. Debt was 37 percent of total capitalization2.

Operations UpdateCimarex invested $1.28 billion in exploration and development in 2017, 59 percent in the Permian region and 39 percent in the Mid-Continent. An additional $45 million was invested in midstream operations in 2017. During 2017, Cimarex participated in the drilling and completion of 319 gross (98 net) wells.

At year-end, 91 gross (34 net) wells were waiting on completion, of which 60 gross (16 net) are in the Mid-Continent and 31 gross (18 net) in the Permian. Cimarex currently is operating 14 drilling rigs.

WELLS COMPLETED BY REGION

For the Three Months Ended

For the Twelve Months Ended

December 31,

December 31,

2017

2016

2017

2016

Gross wells

Permian Basin

32

11

97

48

Mid-Continent

85

44

222

105

117

55

319

153

Net wells

Permian Basin

14

8

55

30

Mid-Continent

10

17

43

31

24

25

98

61

Permian BasinProduction from the Permian Basin averaged 673 MMcfe per day in the fourth quarter, a 32 percent increase over fourth quarter 2016, and a seven percent increase sequentially. Oil volumes averaged 47,642 barrels per day and represented 42 percent of the region's total equivalent production. For the full year, production averaged 631 MMcfe per day, up 25 percent year over year.

Cimarex brought 32 gross (14 net) wells on production in the Permian region during the fourth quarter, bringing the total for the year to 97 gross (55 net) wells. Cimarex currently operates ten rigs in the Permian region.

Activity in the Permian region in the fourth quarter included the completion of 14 wells in the Wolfcamp, Avalon and Bone Spring formations. Cimarex also began drilling operations on two multi-well Wolfcamp developments. The Animal Kingdom project, located in Culberson County, Texas, consists of eight wells targeting multiple landings in the Lower Wolfcamp and the Snowshoe project, located in Reeves County, Texas, is an eight-well project targeting multiple landings in the Upper Wolfcamp. Both are long lateral developments with first production expected during the third quarter of 2018.

As of year-end, Cimarex has completed 70 10,000-foot lateral Wolfcamp wells including 23 in the Lower Wolfcamp and 47 in the Upper Wolfcamp. In addition to the multiple spacing pilots drilled in the Wolfcamp in 2017, another highlight of the year's program was the completion of four 10,000-foot lateral Upper Wolfcamp wells on the western half of our Culberson County acreage, an area that was previously untested. These wells had an average 30-day peak initial production of 2,587 BOE per day (56 percent oil, 26 percent gas, 18 percent NGL). A fifth well is currently flowing back. Cimarex has additional activity planned in this area in 2018 including a development project with drilling scheduled to begin in the third quarter.

Mid-ContinentProduction from the Mid-Continent region averaged 529 MMcfe per day in the fourth quarter, a 19 percent increase over fourth-quarter 2016, and a three percent increase sequentially. Oil volumes averaged 13,999 barrels per day and represented 16 percent of the region's total equivalent production. For the full year, production averaged 509 MMcfe per day, up 11 percent year over year.

Wells brought on production during the fourth quarter totaled 85 gross (10 net) in the Mid-Continent region, bringing the total wells in 2017 to 222 gross (43 net). As planned, drilling to hold company's Meramec acreage was completed in 2017.

Activity in the region continues to focus on the Woodford and Meramec shale plays in western Oklahoma. Recent highlights include the completion of a three-well, stacked Woodford/Meramec test in the 14N-10W township in Canadian County, Oklahoma. This test confirms results of our previous wells in the area. Cimarex operates nearly all of the 24,000 gross acres leased in the 14N-10W area with an average 62 percent working interest. Drilling activity continues in the high return Lone Rock area where Cimarex has six long lateral Woodford wells on production with average 30-day peak initial production of 1,806 BOE per day (35 percent oil, 36 percent gas, 29 percent NGL). The company is currently drilling the Shelly spacing pilot in Lone Rock with first production expected mid-summer.

Cimarex currently operates four rigs in the Mid-Continent.

Please see the latest Corporate Presentation on our website www.cimarex.com for further details.

Production by RegionCimarex's average daily production and commodity price by region is summarized below:

DAILY PRODUCTION BY REGION

For the Three Months Ended

For the Twelve Months Ended

December 31,

December 31,

2017

2016

2017

2016

Permian Basin

Gas (MMcf)

232.6

179.3

217.9

178.1

Oil (Bbls)

47,642

36,253

44,577

36,018

NGL (Bbls)

25,747

19,114

24,269

18,244

Total Equivalent (MMcfe)

672.9

511.5

630.9

503.7

Total Equivalent (BOE)

112,157

85,250

105,157

83,945

Mid-Continent

Gas (MMcf)

300.3

276.3

294.4

280.1

Oil (Bbls)

13,999

9,205

12,457

8,969

NGL (Bbls)

24,176

19,036

23,296

20,513

Total Equivalent (MMcfe)

529.3

445.8

508.9

456.9

Total Equivalent (BOE)

88,225

74,291

84,822

76,165

Total Company

Gas (MMcf)

534.0

457.2

513.6

459.6

Oil (Bbls)

61,771

45,567

57,153

45,158

NGL (Bbls)

49,954

38,184

47,600

38,797

Total Equivalent (MMcfe)

1,204.4

959.7

1,142.1

963.4

Total Equivalent (BOE)

200,729

159,951

190,354

160,555

AVERAGE REALIZED PRICE BY REGION

For the Three Months Ended

For the Twelve Months Ended

December 31,

December 31,

2017

2016

2017

2016

Permian Basin

Gas ($ per Mcf)

2.56

2.85

2.72

2.35

Oil ($ per Bbl)

51.38

44.75

46.96

38.45

NGL ($ per Bbl)

25.07

15.71

20.25

12.32

Mid-Continent

Gas ($ per Mcf)

2.60

2.86

2.78

2.29

Oil ($ per Bbl)

52.72

44.36

47.42

37.65

NGL ($ per Bbl)

26.73

20.58

23.02

15.59

Total Company

Gas ($ per Mcf)

2.58

2.86

2.76

2.31

Oil ($ per Bbl)

51.68

44.67

47.06

38.30

NGL ($ per Bbl)

25.88

18.15

21.61

14.05

Other The following table summarizes the company's current open hedge positions:

1Q18

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

Gas Collars:

PEPL³

Volume (MMBtu/d)

130,000

120,000

90,000

60,000

50,000

50,000

20,000

Wtd Avg Floor

2.57

2.39

2.33

2.28

2.23

2.23

1.98

Wtd Avg Ceiling

2.93

2.70

2.56

2.49

2.46

2.46

2.16

El Paso Perm³

Volume (MMBtu/d)

90,000

90,000

70,000

50,000

40,000

40,000

20,000

Wtd Avg Floor

2.52

2.22

2.14

2.06

1.98

1.98

1.65

Wtd Avg Ceiling

2.84

2.48

2.32

2.23

2.14

2.14

1.80

Oil Collars:

WTI⁴

Volume (Bbl/d)

29,000

29,000

25,000

19,000

13,000

13,000

6,000

Wtd Avg Floor

47.28

47.83

47.48

48.63

48.92

48.92

50.00

Wtd Avg Ceiling

56.33

57.93

57.76

58.80

61.04

61.04

66.82

Oil Basis Swaps:

WTI Midland⁵

Volume (Bbl/d)

13,000

14,000

14,000

9,000

6,000

6,000

1,000

Weighted Avg Differential⁶

(0.72)

(0.72)

(0.72)

(0.59)

(0.51)

(0.51)

(0.70)

Conference call and webcastCimarex will host a conference call tomorrow, February 15, at 11:00 a.m. EST (9:00 a.m. MST). The call will be webcast and accessible on the Cimarex website at www.cimarex.com. To participate in the live, interactive call, please dial 866-367-3053 ten minutes before the scheduled start (callers in Canada dial 855-669-9657 and international callers dial 412-902-4216). A replay will be available on the company's website.

Investor PresentationFor more details on Cimarex's 2017 results, please refer to the company's investor presentation available at www.cimarex.com.

This press release contains forward-looking statements, including statements regarding projected results and future events. These forward-looking statements are based on management's judgment as of the date of this press release and include certain risks and uncertainties. Please refer to the company's Annual Report on Form 10-K/A for the year ended December 31, 2016, filed with the SEC, in the 2017 Annual Report and Form 10-K to be filed with the SEC, and other filings including our Current Reports on Form 8-K and Quarterly Reports on Form 10-Q, for a list of certain risk factors that may affect these forward-looking statements.

Actual results may differ materially from company projections and other forward-looking statements and can be affected by a variety of factors outside the control of the company including among other things: oil, NGL and natural gas price levels and volatility; higher than expected costs and expenses, including the availability and cost of services and materials; compliance with environmental and other regulations; risks associated with operating in one major geographic area; environmental liabilities; the ability to receive drilling and other permits and rights-of-way in a timely manner; development drilling and testing results; declines in the values of our oil and gas properties resulting in impairments; the potential for production decline rates to be greater than expected; performance of acquired properties and newly drilled wells; costs and availability of third party facilities for gathering, processing, refining and transportation; regulatory approvals, including regulatory restrictions on federal lands; legislative or regulatory changes, including initiatives related to hydraulic fracturing, emissions and disposal of produced water; unexpected future capital expenditures; economic and competitive conditions; the availability and cost of capital; the ability to obtain industry partners to jointly explore certain prospects, and the willingness and ability of those partners to meet capital obligations when requested; changes in estimates of proved reserves; derivative and hedging activities; the success of the company's risk management activities; title to properties; litigation; the ability to complete property sales or other transactions; the effectiveness of controls over financial reporting; and other factors discussed in the company's reports filed with the SEC. Cimarex Energy Co. encourages readers to consider the risks and uncertainties associated with projections and other forward-looking statements. In addition, the company assumes no obligation to publicly revise or update any forward-looking statements based on future events or circumstances.

___________________________

1

Adjusted net income and adjusted cash flow from operations are non-GAAP financial measures. See below for reconciliations of the related GAAP amounts.

2

Debt to total capitalization is calculated by dividing long-term debt by long-term debt plus stockholders' equity.

Index price on basis swaps is WTI NYMEX less the weighted average differential shown in table.

RECONCILIATION OF ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE

The following table provides a reconciliation from generally accepted accounting principles (GAAP) measures of net income (loss) and earnings (loss) per share to adjusted net income and adjusted earnings per share (non-GAAP) for the periods indicated.

For the Three Months Ended

For the Twelve Months Ended

December 31,

December 31,

2017

2016

2017

2016

(in thousands, except per share data)

Net income (loss)

$

174,696

$

47,783

$

494,329

$

(408,803)

Impairment of oil and gas properties

—

—

—

757,670

Mark-to-market (gain) loss on open derivative positions

30,160

30,417

(22,843)

63,186

Loss on early extinguishment of debt

18

—

28,187

—

Asset Retirement Obligation

10,460

—

10,460

—

Impact of reduction in Federal statutory tax rate

(61,146)

—

(61,146)

—

Tax impact*

(14,142)

(11,832)

(5,768)

(298,867)

Adjusted net income

$

140,046

$

66,368

$

443,219

$

113,186

Diluted earnings (loss) per share**

$

1.83

$

0.50

$

5.19

$

(4.38)

Adjusted diluted earnings per share**

$

1.47

$

0.70

$

4.65

$

1.19

Diluted shares attributable to common stockholders and participating securities

95,363

95,175

95,265

95,176

Adjusted net income and adjusted diluted earnings per share excludes the noted items because management believes these items affect the comparability of operating results. The company discloses these non-GAAP financial measures as a useful adjunct to GAAP earnings because:

a) Management uses adjusted net income to evaluate the company's operating performance between periods and to compare the company's performance to other oil and gas exploration and production companies.

b) Adjusted net income is more comparable to earnings estimates provided by research analysts.

*

The tax impact of the 2016 periods is calculated using a tax rate that excludes the effects of tax adjustments recorded in the fourth quarter primarily related to the revision of previous tax balances.

**

Earnings (loss) per share are based on actual figures rather than the rounded figures presented.

RECONCILIATION OF ADJUSTED CASH FLOW FROM OPERATIONS

The following table provides a reconciliation from generally accepted accounting principles (GAAP) measures of net cash provided by operating activities to adjusted cash flows from operations (non-GAAP) for the periods indicated.

For the Three Months Ended

For the Twelve Months Ended

December 31,

December 31,

2017

2016

2017

2016

(in thousands)

Net cash provided by operating activities

$

340,759

$

185,061

$

1,096,564

$

625,849

Change in operating assets and liabilities

16,339

33,679

89,067

3,289

Adjusted cash flow from operations

$

357,098

$

218,740

$

1,185,631

$

629,138

Management uses the non-GAAP financial measure of adjusted cash flow from operations as a means of measuring our ability to fund our capital program and dividends, without fluctuations caused by changes in current assets and liabilities, which are included in the GAAP measure of net cash provided by operating activities. Management believes this non-GAAP financial measure provides useful information to investors for the same reason, and that it is also used by professional research analysts in providing investment recommendations pertaining to companies in the oil and gas exploration and production industry.

PROVED RESERVES

Gas

Oil

NGL

Total

Total

(Bcf)

(MBbls)

(MBbls)

(Bcfe)

(MBOE)

December 31, 2016

1,471

105,878

130,633

2,890.5

481,748

Revisions of previous estimates

(40)

(1,225)

(2,099)

(59.7)

(9,951)

Extensions and discoveries

364

53,464

42,692

940.7

156,786

Purchase of reserves

1

42

78

1.4

227

Production

(187)

(20,861)

(17,374)

(416.9)

(69,479)

Sale of properties

(1)

(60)

(70)

(1.8)

(294)

December 31, 2017

1,608

137,238

153,860

3,354.2

559,037

Proved developed reserves

Year-end 2016

1,145

92,032

99,176

2,292.0

381,995

Year-end 2017

1,335

114,116

126,227

2,776.6

462,761

2017

2016

% Change

Pre-tax PV-10 ($ in millions) *

3,725

2,122

76 %

Standardized Measure ($ in millions)

3,285

1,893

74 %

Average prices used in Standardized Measure

2017

2016

% Change

Gas ($ per Mcf)

2.98

2.48

20 %

Oil ($ per Bbl)

51.34

42.75

20 %

NGL ($ per Bbl)

19.09

14.37

33 %

* Pre-tax PV-10 is a non-GAAP financial measure. Pre-tax PV-10 is comparable to the standardized measure, which is the most directly comparable GAAP financial measure. Pre-tax PV-10 is computed on the same basis as the standardized measure but without deducting future income taxes. As of December 31, 2017 and 2016, Cimarex's discounted future income taxes were $439.8 million and $229.3 million, respectively. Cimarex's standardized measure of discounted future net cash flows was $3,285.0 million at year-end 2017 and $1,892.6 million at year-end 2016. Management uses pre-tax PV-10 as one measure of the value of the company's proved reserves and to compare relative values of proved reserves to other exploration and production companies without regard to income taxes. Management believes pre-tax PV-10 is a useful measure for comparison of proved reserve values among companies because, unlike standardized measure, it excludes future income taxes that often depend on the unique income tax characteristics of the owner of the reserves rather than on the nature, location and quality of the reserves themselves. Management further believes that professional research analysts and rating agencies use pre-tax PV-10 in similar ways. However, pre-tax PV-10 is not a substitute for the standardized measure of discounted future net cash flows. Cimarex's pre-tax PV-10 and the standardized measure of discounted future net cash flows do not purport to present the fair value of its oil and natural gas reserves.

PROVED RESERVES BY REGION

Gas

Oil

NGL

Total

Total

(Bcf)

(MBbls)

(MBbls)

(Bcfe)

(MBOE)

Mid-Continent

1,033

31,853

85,292

1,735.6

289,261

Permian Basin

574

105,198

68,530

1,616.1

269,354

Other

1

187

38

2.5

422

1,608

137,238

153,860

3,354.2

559,037

OIL AND GAS CAPITALIZED EXPENDITURES

For the Three Months Ended

For the Twelve Months Ended

December 31,

December 31,

2017

2016

2017

2016

(in thousands)

Acquisitions:

Proved

$

678

$

60

$

938

$

2,678

Unproved

2,590

319

6,853

11,865

3,268

379

7,791

14,543

Exploration and development:

Land and seismic

17,157

16,260

140,516

61,870

Exploration and development

326,855

229,603

1,140,548

672,882

344,012

245,863

1,281,064

734,752

Sale proceeds:

Proved

(1,947)

(2,473)

(2,032)

(15,078)

Unproved

(1,597)

(1)

(9,648)

(9,609)

(3,544)

(2,474)

(11,680)

(24,687)

$

343,736

$

243,768

$

1,277,175

$

724,608

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (unaudited)

For the Three Months Ended

For the Twelve Months Ended

December 31,

December 31,

2017

2016

2017

2016

(in thousands, except per share data)

Revenues:

Oil sales

$

293,686

$

187,277

$

981,646

$

632,934

Gas sales

126,810

120,285

516,936

388,786

NGL sales

118,918

63,743

375,421

199,498

Gas gathering and other, net

11,526

10,850

44,246

36,127

550,940

382,155

1,918,249

1,257,345

Costs and expenses:

Impairment of oil and gas properties

—

—

—

757,670

Depreciation, depletion, amortization, and accretion

142,482

91,096

461,655

400,176

Production

71,771

51,111

262,180

232,002

Transportation, processing, and other operating

59,606

51,140

231,640

190,725

Gas gathering and other

9,910

8,308

35,840

31,785

Taxes other than income

26,760

18,067

89,864

61,946

General and administrative

21,161

18,462

79,996

73,901

Stock compensation

6,637

5,741

26,256

24,523

(Gain) loss on derivative instruments, net

29,051

32,699

(21,210)

55,749

Other operating expense, net

337

462

1,314

755

367,715

277,086

1,167,535

1,829,232

Operating income (loss)

183,225

105,069

750,714

(571,887)

Other (income) and expense:

Interest expense

16,836

20,712

74,821

83,272

Capitalized interest

(5,492)

(5,290)

(22,948)

(21,248)

Loss on early extinguishment of debt

18

—

28,187

—

Other, net

(2,338)

(3,218)

(11,342)

(10,707)

Income (loss) before income tax

174,201

92,865

681,996

(623,204)

Income tax expense (benefit)

(495)

45,082

187,667

(214,401)

Net income (loss)

$

174,696

$

47,783

$

494,329

$

(408,803)

Earnings (loss) per share to common stockholders:

Basic

$

1.83

$

0.50

$

5.19

$

(4.38)

Diluted

$

1.83

$

0.50

$

5.19

$

(4.38)

Dividends declared per share

$

0.08

$

0.08

$

0.32

$

0.32

Shares attributable to common stockholders:

Unrestricted common shares outstanding

93,569

93,379

93,466

93,379

Diluted common shares

93,612

93,422

93,509

93,379

Comprehensive income (loss):

Net income (loss)

$

174,696

$

47,783

$

494,329

$

(408,803)

Other comprehensive income:

Change in fair value of investments, net of tax

394

(64)

1,254

504

Total comprehensive income (loss)

$

175,090

$

47,719

$

495,583

$

(408,299)

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (unaudited)

For the Three Months Ended

For the Twelve Months Ended

December 31,

December 31,

2017

2016

2017

2016

(in thousands)

Cash flows from operating activities:

Net income (loss)

$

174,696

$

47,783

$

494,329

$

(408,803)

Adjustments to reconcile net income (loss) to net cash provided by operating activities: